TASMAN METALS LTD.

_______________________________________________________________________________________________________________________________________

TASMAN METALS LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED

MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

_______________________________________________________________________________________________________________________________________

Page 1

NOTICE OF NO AUDITOR REVIEW OF

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

In accordance with National Instrument 51-102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these condensed consolidated interim financial statements they must be accompanied by a notice indicating that the condensed consolidated interim financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed consolidated interim financial statements of the Company have been prepared by and are the responsibility of the Company's management.

The Company's auditors have not performed a review of these condensed consolidated interim financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.

Page 2

TASMAN METALS LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

	Notes		May 31, 2015 $			August 31, 2014 $
ASSETS
Current assets
Cash				3,066,969			6,136,271
Amounts receivable				6,448			4,582
GST/VAT receivables				21,625			117,813
Prepaids				81,549			76,294

Total current assets				3,176,591			6,334,960
Non-current assets
Investments		4		14,159			39,018
Property, plant and equipment		5		60,351			103,075
Exploration and evaluation assets		6		12,252,431			10,866,653
Bond deposit				31,883			31,865
Total non-current assets				12,358,824			11,040,611

TOTAL ASSETS				15,535,415			17,375,571
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities				194,493			931,838
TOTAL LIABILITIES				194,493			931,838
SHAREHOLDERS' EQUITY
Share capital		7		25,910,384			25,910,384
Share-based payments reserve				9,174,090			9,122,790
Deficit				(19,605,284	)		(18,476,032	)
Accumulated other comprehensive loss				(138,268	)		(113,409	)

TOTAL SHAREHOLDERS' EQUITY				15,340,922			16,443,733

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY				15,535,415			17,375,571

Event after the Reporting Period - See Note 12

These condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors on July 15, 2015 and are signed on its behalf by:

The accompanying notes are an integral part of these condensed consolidated interim financial statements

/s/ Xxxx Xxxxx	/s/ Xxxx XxXxxx
Xxxx Xxxxx	Xxxx XxXxxx
Director	Director

Page 3

TASMAN METALS LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

		Three Months Ended						Nine Months Ended
	Note	May 31, 2015 $			May 31, 2014 $			May 31, 2015 $			May 31, 2014 $
Expenses
Accounting and administration	8(b)(ii)		21,935			27,374			87,797			104,013
Audit			-			-			40,938			51,117
Corporate development			11,865			51,277			25,896			126,485
Depreciation	5		9,436			13,778			32,583			40,857
General exploration			3,666			18,641			13,862			37,320
Insurance			24,270			22,837			87,580			78,552
Legal			47,608			8,790			132,055			231,603
Management fees	8(a)(i)		45,000			40,500			135,000			121,500
Office			6,814			19,512			47,906			72,143
Professional fees	8		74,606			105,313			301,035			366,157
Regulatory fees			18,480			17,898			54,828			54,802
Rent			9,519			11,483			29,442			36,827
Salaries and benefits			6,490			93,841			21,680			272,304
Shareholder costs			17,448			18,270			21,188			23,646
Share-based compensation	7(e)		-			82,000			51,300			225,200
Transfer agent			12,268			14,619			20,260			21,048
Travel			8,377			31,950			66,430			119,390
			317,782			578,083			1,169,780			1,982,964
Loss before other items			(317,782	)		(578,083	)		(1,169,780	)		(1,982,964	)
Other items
Gain on sale of equipment	5		11,041			-			11,041			-
Impairment of exploration and evaluation assets	6		-			(37,631	)		(7,154	)		(44,230	)
Interest income			8,802			25,993			37,812			60,854
Foreign exchange			(3,802	)		(22,075	)		(1,171	)		(24,263	)
			16,041			(33,713	)		40,528			(7,639	)
Net loss for the period			(301,741	)		(611,796	)		(1,129,252	)		(1,990,603	)
Other comprehensive loss			(23,410	)		(10,141	)		(24,859	)		(19,134	)
Comprehensive loss for the period			(325,151	)		(621,937	)		(1,154,111	)		(2,009,737	)
Basic and diluted loss per common share			(0.00	)		(0.01	)		(0.02	)		(0.03	)
Weighted average number of common shares outstanding			66,141,922			65,739,508			66,141,922			62,780,459

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Page 4

TASMAN METALS LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

	Nine Months Ended May 31, 2015
	Share Capital									Accumulated
	Number of Shares		Amount $		Share-Based Payments Reserve $		Deficit $			Other Comprehensive Loss $			Total Equity $
Balance at August 31, 2014		66,141,922		25,910,384		9,122,790		(18,476,032	)		(113,409	)		16,443,733
Share-based compensation on share options		-		-		51,300		-			-			51,300
Unrealized loss on investments		-		-		-		-			(24,859	)		(24,859	)
Net loss for the period		-		-		-		(1,129,252	)		-			(1,129,252	)
Balance at May 31, 2015		66,141,922		25,910,384		9,174,090		(19,605,284	)		(138,268	)		15,340,922

	Nine Months Ended May 31, 2014
	Share Capital											Accumulated
	Number of Shares		Amount $			Share-Based Payments Reserve $			Deficit $			Other Comprehensive Loss $			Total Equity $
Balance at August 31, 2013		60,850,982		20,299,802			9,056,102			(16,034,024	)		(111,019	)		13,210,861
Common shares issued for:
Cash - private placement		4,919,940		5,411,934			-			-			-			5,411,934
Cash - exercise of share options		285,000		351,000			-			-			-			351,000
Exploration and evaluation assets		86,000		104,420			-			-			-			104,420
Share issue costs		-		(620,282	)		-			-			-			(620,282	)
Share-based compensation on share options		-		-			225,200			-			-			225,200
Share-based compensation on finder's option		-		-			189,222			-			-			189,222
Share-based compensation on finders' warrants		-		-			10,072			-			-			10,072
Transfer on exercise of share options		-		386,900			(386,900	)		-			-			-
Unrealized loss on investment		-		-			-			-			(19,134	)		(19,134	)
Net loss for the period		-		-			-			(1,990,603	)		-			(1,990,603	)
Balance at May 31, 2014		66,141,922		24,933,774			9,093,696			(18,024,627	)		(130,153	)		16,872,690

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Page 5

TASMAN METALS LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

	Nine Months Ended
	May 31, 2015 $			May 31, 2014 $
Operating activities
Net loss for the period		(1,129,252	)		(1,990,603	)
Adjustments for:
Depreciation		32,583			40,857
Share-based compensation		51,300			225,200
Impairment of exploration and evaluation assets		7,154			44,230
Gain on sale of equipment		(11,041	)		-
		(1,049,256	)		(1,680,316	)
Changes in non-cash working capital items:
Increase in amounts receivable		(1,866	)		(18,489	)
Decrease (increase) in GST/VAT receivables		96,188			(988	)
Increase in prepaids		(5,255	)		(27,637	)
Increase (decrease) in accounts payable and accrued liabilities		70,168			(78,490	)
		159,235			(125,604	)
Net cash used in operating activities		(890,021	)		(1,805,920	)
Investing activities
Proceeds on sale of equipment		21,182			-
Additions to exploration and evaluation assets		(2,200,445	)		(1,542,008	)
Additions to property, plant and equipment		-			(6,555	)
Increase in bond deposit		(18	)		(173	)
Increase in investments		-			(16,603	)
Net cash used in investing activities		(2,179,281	)		(1,565,339	)
Financing activities
Issuance of common shares		-			5,762,934
Share issue costs		-			(420,988	)
Net cash provided by financing activities		-			5,341,946
Net change in cash		(3,069,302	)		1,970,687
Xxxx at beginning of period		6,136,271			5,601,492
Cash at end of period		3,066,969			7,572,179

Supplemental cash flow information - see Note 11

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Page 6

TASMAN METALS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

1.	Nature of Operations

Tasman Metals Ltd. ("Tasman" or the "Company") was incorporated under the laws of the Province of British Columbia on August 27, 2007. The Company's common shares are listed and traded on the TSX Venture Exchange ("TSXV") under the symbol "TSM" and on the New York Stock Exchange Market ("NYSE MKT"), under the symbol "TAS". The Company's head office is located at #0000 - 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0, Xxxxxx.

The Company is a junior resource company engaged in the acquisition and exploration of unproven mineral interests in Scandinavia. As at May 31, 2015 the Company has not earned any production revenue, nor found proved reserves on any of its mineral interests.

The Company is in the process of exploring and evaluating its mineral properties. On the basis of information to date, it has not yet determined whether these properties contain economically recoverable ore reserves. The underlying value of the mineral properties and related deferred acquisition costs is entirely dependent on the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete development and upon future profitable production. Exploration and evaluation assets represent costs incurred to date, less amounts depreciated and/or written off, and do not necessarily represent present or future values.

As at May 31, 2015 the Company had working capital of $2,982,098. These condensed consolidated interim financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business operations for the foreseeable future. The Company's ability to continue as a going concern is dependent upon the ability of the Company to obtain the necessary financing to develop properties and to establish future profitable production. The Company's operations are primarily funded from equity financings which are dependent upon many external factors and may be difficult to impossible to secure or raise when required. Although management considers that the Company has adequate resources to maintain its core operations and planned work programs on its existing exploration and evaluation assets for the next twelve months, the Company recognizes that work programs may change with ongoing results and, as a result, it may be required to obtain additional financing. While the Company has been successful in securing financings in the past, there can be no assurance that it will be able to do so in the future.

2.	Basis of Preparation

Statement of Compliance

These condensed consolidated interim financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS"), and in accordance with International Accounting Standards ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"). These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended August 31, 2014, which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies followed in these condensed consolidated interim financial statements are consistent with those applied in the Company's consolidated financial statements for the year ended August 31, 2014.

Basis of Measurement

The Company's consolidated financial statements have been prepared on the historical cost basis except for the revaluation of certain financial assets and financial liabilities to fair value.

Basis of Presentation

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, revenue and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Page 7

TASMAN METALS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

2.	Basis of Preparation (continued)

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods.

3.	Summary of Significant Accounting Policies

The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the audited annual consolidated financial statements as at August 31, 2014. The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended August 31, 2014.

4.	Investments

	May 31, 2015
	Number of Shares		Cost $		Accumulated Compre- hensive Loss $			Carrying Value $
Hannans Reward Limited ("Hannans")		2,647,059		135,824		(130,791	)		5,033
Thomson Resources Ltd. ("Thomson")		600,000		16,603		(7,477	)		9,126
				152,427		(138,268	)		14,159

	August 31, 2014
	Number of Shares		Cost $		Accumulated Compre- hensive Loss $			Carrying Value $
Hannans		2,647,059		135,824		(108,977	)		26,847
Thomson		600,000		16,603		(4,432	)		12,171
				152,427		(113,409	)		39,018

The carrying values of the investments were determined using quoted market values.

Page 8

TASMAN METALS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

5. Property, Plant and Equipment

Cost:	Computers $			Office Furniture and Equipment $			Field Equipment $			Vehicles $			Total $
Balance at August 31, 2013		18,032			19,767			98,081			134,475			270,355
Additions		-			-			6,555			-			6,555
Disposals		-			-			-			(44,168	)		(44,168	)
Balance at August 31, 2014		18,032			19,767			104,636			90,307			232,742
Disposals		-			-			-			(44,347	)		(44,347	)
Balance at May 31, 2015		18,032			19,767			104,636			45,960			188,395
Accumulated Depreciation:
Balance at August 31, 2013		(8,542	)		(7,043	)		(34,087	)		(45,198	)		(94,870	)
Depreciation		(3,500	)		(3,833	)		(20,888	)		(26,414	)		(54,635	)
Disposals		-			-			-			19,838			19,838
Balance at August 31, 2014		(12,042	)		(10,876	)		(54,975	)		(51,774	)		(129,667	)
Depreciation		(2,625	)		(2,875	)		(16,022	)		(11,061	)		(32,583	)
Disposals		-			-			-			34,206			34,206
Balance at May 31, 2015		(14,667	)		(13,751	)		(70,997	)		(28,629	)		(128,044	)
Carrying Value:
Balance at August 31, 2014		5,990			8,891			49,661			38,533			103,075
Balance at May 31, 2015		3,365			6,016			33,639			17,331			60,351

During the nine months ended May 31, 2015 the Company sold a vehicle for $21,182 realizing a gain of $11,041.

6.	Exploration and Evaluation Assets

	May 31, 2015
	Acquisition Costs $		Deferred Exploration Costs $		Total $
Rare Earth Properties
Norra Xxxx		94,877		11,210,723		11,305,600
Olserum		143,357		575,251		718,608
Other		38,701		5,287		43,988
Other Properties		122,752		61,483		184,235
		399,687		11,852,744		12,252,431

	August 31, 2014
	Acquisition Costs $		Deferred Exploration Costs $		Total $
Rare Earth Properties
Norra Xxxx		92,797		9,889,283		9,982,080
Olserum		143,357		568,594		711,951
Other		15,960		4,758		20,718
Other Properties		112,853		39,051		151,904
		364,967		10,501,686		10,866,653

Page 9

TASMAN METALS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

6. Exploration and Evaluation Assets (continued)

	Rare Earth Element Properties								Other
	Norra Xxxx $			Olserum $		Other $			Properties $			Total $
Balance at August 31, 2013		7,202,949			613,182		64,948			2,860			7,883,939
Exploration costs
Consulting		579,055			72,570		-			33,436			685,061
Database		2,424			-		-			191			2,615
Exploration site		8,490			1,069		-			265			9,824
Geochemical		94,575			3,723		-			4,192			102,490
Geological		156,299			-		-			-			156,299
Maps		1,442			-		-			437			1,879
Metallurgical testing		429,895			-		-			-			429,895
Recovery		(69,808	)		-		-			-			(69,808	)
Salaries		43,853			-		-			-			43,853
Surface rights		76,364			-		-			-			76,364
Technical report		1,364,575			-		-			-			1,364,575
Travel		22,215			2,896		-			76			25,187
		2,709,379			80,258		-			38,597			2,828,234
Acquisition costs
Mining rights		16,832			18,511		-			16,353			51,696
Issuance of common shares		52,920			-		-			51,500			104,420
Acquisition		-			-		-			45,000			45,000
		69,752			18,511		-			112,853			201,116
Impairment		-			-		(44,230	)		(2,406	)		(46,636	)
Balance at August 31, 2014		9,982,080			711,951		20,718			151,904			10,866,653
Exploration costs
Consulting		286,578			4,755		-			5,178			296,511
Drilling		107,778			-		-			-			107,778
Exploration site		1,635			-		-			201			1,836
Geochemical		34,113			-		-			2,525			36,638
Geological		60,182			-		-			-			60,182
Maps		-			-		1,157			2,671			3,828
Recovery		(52,632	)		-		-			-			(52,632	)
Salaries		33,598			1,902		-			11,857			47,357
Surface rights		79,651			-		-			-			79,651
Technical report		768,199			-		-			-			768,199
Travel		2,338			-		-			-			2,338
		1,321,440			6,657		1,157			22,432			1,351,686
Acquisition costs
Mining rights		2,080			-		29,267			9,899			41,246
Impairment		-			-		(7,154	)		-			(7,154	)
Balance at May 31, 2015		11,305,600			718,608		43,988			184,235			12,252,431

(a)

Rare Earth Element Properties

Norra Xxxx

The Norra Xxxx property consists of four staked exploration claims and a mining lease located in southern Sweden.

During fiscal 2014 the Company issued 36,000 common shares at a fair value of $52,920 to acquire certain surface access rights to the Norra Xxxx property.

Page 10

TASMAN METALS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

6. Exploration and Evaluation Assets (continued)

Olserum

During fiscal 2012 the Company acquired a 100 % interest in the Olserum property, comprising one claim, in southern Sweden. The Olserum property was purchased from Norrsken Energy Limited, a private company registered in the United Kingdom, for total consideration of 37,746 common shares of the Company issued at a fair value of $95,120. The Company subsequently staked a further five claims surrounding the Olserum property.

Other

During the nine months ended May 31, 2015 the Company relinquished certain exploration claims and recorded an impairment charge of $7,154 (fiscal 2014 - $44,230) to exploration and evaluation assets.

As at May 31, 2015 the Company has 10 exploration claims and one mining lease in Sweden.

(b)

Other Properties

(i)

Tungsten Properties

On October 7, 2013 the Company entered into a letter agreement with Tumi Resources Ltd. ("Tumi") and acquired a 100% interest in seven exploration licenses (the "Tungsten Projects") located in south-central Sweden by paying $45,000 cash and issuing 50,000 common shares of the Company at a fair value of $51,500. A further 50,000 common shares are issuable upon commencement of production from any of the Tungsten Projects. Tumi has two common directors.

(ii)

Iron Ore Properties

On May 16, 2010 the Company entered into an option agreement with Hannans whereby Xxxxxxx subsequently earned a 75% interest in the Sautusvaara, Vieto, Harrejaure and Lauukujarvi exploration claims (the "Iron Ore Claims") in Sweden. Xxxxxxx could earn a further 15% interest in the Iron Ore Claims by funding a feasibility study on at least one Iron Ore Claim prior to June 30, 2018, including minimum expenditures of AUS $100,000 per annum. On June 10, 2015 the Company was notified by Xxxxxxx of its termination of the option agreement.

There were no costs attributable to the Iron Ore Claims as at May 31, 2015 or August 31, 2014.

(iii)

Other

During fiscal 2014 the Company relinquished certain exploration claims in Sweden and recorded an impairment charge of $2,406 to exploration and evaluation assets.

See also Notes 6(b)(i) and 12.

Page 15

TASMAN METALS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

9. Segmented Information

The Company is involved in the exploration and development of resource properties in certain Scandinavian countries, with corporate operations in Canada. The Company is in the exploration stage and accordingly, has no reportable segment revenues or operating results.

The Company's total assets are segmented geographically as follows:

	May 31, 2015
	Canada $		Scandinavia $		Total $
Current assets		2,969,673		206,918		3,176,591
Investments		14,159		-		14,159
Property, plant and equipment		-		60,351		60,351
Exploration and evaluation assets		-		12,252,431		12,252,431
Bond deposit		-		31,883		31,883
		2,983,832		12,551,583		15,535,415

	August 31, 2014
	Canada $		Scandinavia $		Total $
Current assets		5,945,775		389,185		6,334,960
Investments		39,018		-		39,018
Property, plant and equipment		-		103,075		103,075
Exploration and evaluation assets		-		10,866,653		10,866,653
Bond deposit		-		31,865		31,865
		5,984,793		11,390,778		17,375,571

10.	Financial Instruments and Risk Management

Categories of Financial Assets and Financial Liabilities

Financial assets are classified into one of the following four categories: FVTPL; held-to-maturity investments; loans and receivables; and available-for-sale. Financial liabilities are classified as FVTPL or other temporary liabilities. The carrying values of the Company's financial instruments are classified into the following categories:

Financial Instrument	Category	May 31, 2015 $			August 31, 2014 $
Cash	FVTPL		3,066,969			6,136,271
Investments	Available-for-sale		14,159			39,018
Amounts receivable	Loans and receivables		6,448			4,582
Accounts payable and accrued liabilities	Other liabilities		(194,493	)		(931,838	)

The Company's financial instruments recorded at fair value require disclosure about how the fair value was determined based on significant levels of inputs described in the following hierarchy:

Level 1 -

Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions occur in sufficient frequency and value to provide pricing information on an ongoing basis.

Page 16

TASMAN METALS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

10.	Financial Instruments and Risk Management (continued)

Level 2 -

Pricing inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable as of the reporting date. Level 2 valuations are based on inputs including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the market place.

Level 3 -

Valuations in this level are those with inputs for the asset or liability that are not based on observable market data.

The recorded amounts for amounts receivable and accounts payable and accrued liabilities approximate their fair value due to their short-term nature. The Company's cash and investments under the fair value hierarchy are measured using Level 1 inputs.

The Company's risk exposures and the impact on the Company's financial instruments are summarized below:

Credit Risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash and amounts receivable. Management believes that the credit risk concentration with respect to financial instruments included in cash and amounts receivable is remote.

Liquidity Risk

Liquidity risk is the risk that the Company will not have the resources to meet its obligations as they fall due. The Company manages this risk by closely monitoring cash forecasts and managing resources to ensure that it will have sufficient liquidity to meet its obligations. All of the Company's financial liabilities are classified as current and are anticipated to mature within the next fiscal period. The following table is based on the contractual maturity dates of financial assets and the earliest date on which the Company can be required to settle financial liabilities.

	Contractual Maturity Analysis at May 31, 2015
	Less than 3 Months $			3 - 12 Months $		1 - 5 Years $		Over 5 Years $		Total $
Cash		3,066,969			-		-		-		3,066,969
Investments		-			-		14,159		-		14,159
Amounts receivable		6,448			-		-		-		6,448
Accounts payable and accrued liabilities		(194,493	)		-		-		-		(194,493	)

	Contractual Maturity Analysis at August 31, 2014
	Less than 3 Months $			3 - 12 Months $		1 - 5 Years $		Over 5 Years $		Total $
Cash		6,136,271			-		-		-		6,136,271
Investments		-			-		39,018		-		39,018
Amounts receivable		4,582			-		-		-		4,582
Accounts payable and accrued liabilities		(931,838	)		-		-		-		(931,838	)

Market Risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. These fluctuations may be significant.

Page 17

TASMAN METALS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

10.	Financial Instruments and Risk Management (continued)

(a)

Interest Rate Risk

The Company is exposed to interest rate risk to the extent that the cash bears floating rates of interest. The interest rate risk on cash and on the Company's obligations are not considered significant.

(b)

Foreign Currency Risk

The Company's functional currency is the Canadian dollar and major transactions are transacted in Canadian Dollars and Swedish Kronors ("SEK"). The Company maintains SEK bank accounts in Sweden to support the cash needs of its foreign operation. Management believes the foreign exchange risk related to currency conversions are minimal and therefore does not hedge its foreign exchange risk. At May 31, 2015, 1 Canadian Dollar was equal to 6.86 SEK.

Balances are as follows:

	Swedish Kronors			CDN $ Equivalent
Cash		1,212,048			176,683
Amounts receivable		22,040			3,213
VAT receivable		80,597			11,749
Accounts payable and accrued liabilities		(438,806	)		(63,966	)
		875,879			127,679

Based on the net exposures as of May 31, 2015 and assuming that all other variables remain constant, a 10% fluctuation on the Canadian Dollar against the SEK would result in the Company's net loss to be approximately $11,500 higher (or lower).

Capital Management

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business. The Company defines capital that it manages as share capital, cash and cash equivalents and short-term investments. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

11. Supplemental Cash Flow Information

Non-cash activities were conducted by the Company as follows:

	2015 $			2014 $
Operating activity
(Decrease) increase in accounts payable and accrued liabilities		(807,513	)		215,668
Financing activities
Issuance of common shares		-			386,000
Share issue costs		-			(199,294	)
Share-based payments reserve		-			(187,606	)
		-			-
Investing activity
Change in exploration and evaluation assets		807,513			(215,668	)

Page 18

TASMAN METALS LTD.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MAY 31, 2015

(Unaudited - Expressed in Canadian Dollars)

______________________________________________________________________________________________________________________________________

12. Event after the Reporting Period

On June 2, 2015 the Company completed the purchase of 100% interests in two chromite projects (Akanvaara and Koitelainen), comprising of 120 exploration claims and claim applications located in north-eastern Finland. The Company paid $45,529 to the vendor, Kipu Metals Corp. ("Kipu"), a private corporation of which the President of the Company and a director of the Company are also directors and shareholders of Kipu.

Page 19

	2015				2014
	Number		Weighted Average Exercise Price $		Number		Weighted Average Exercise Price $
Balance, beginning and end of period		295,907		1.10		-		-

Number Outstanding	Exercise Price $		Expiry Date
192,000		1.10	February 11, 2017
103,907		1.10	March 31, 2017
295,907

	2015			2014
	Number		Weighted Average Exercise Price $	Number			Weighted Average Exercise Price $
Balance, beginning of period		4,935,435	1.50		2,090,667			1.85
Issued		-	-		4,935,435			1.50
Expired		-	-		(2,090,667	)		1.85
Balance, end of period		4,935,435	1.50		4,935,435			1.50

Number Outstanding		Exercise Price $	Expiry Date
	3,891,358	1.50	February 11, 2017
	1,044,077	1.50	March 31, 2017
	4,935,435

	2015	2014
Risk-free interest rate	1.22%	1.26% - 1.46%
Estimated volatility	82%	87% - 96%
Expected life	3 years	3 years
Expected dividend yield	0%	0%
Expected forfeiture rate	0%	0%

Document Metadata

Table of Contents

TASMAN METALS LTD.

Document Metadata

	2015				2014
	Number of Options			Weighted Average Exercise Price $	Number of Options			Weighted Average Exercise Price $
Balance, beginning of period		2,535,000		1.92		3,781,500			2.01
Granted		135,000		0.60		360,000			0.85
Exercised		-		-		(285,000	)		1.23
Expired		(2,145,000	)	2.07		(1,011,500	)		1.91
Balance, end of period		525,000		0.97		2,845,000			1.99